Landlords Are Using a New Digital Tool to Dig Up Dirt on Potential Tenants
It’s already pretty tough to rent a decent place in Toronto and Vancouver.
With record-high housing prices in some Canadian cities, a lot of people are having a tough time finding a decent place to live. Landlords are being inundated with applications. Well, those landlords have a new tool to screen their wannabe tenants: Naborly, a startup that analyzes up to 500 data points on each potential renter, scouring everything from media mentions to Facebook profiles, even accounting for employment stability to warn landlords if a tenant might struggle to pay rent.
Dylan Lenz, the Toronto-based founder of Naborly, was inspired to make the website after travelling to India with his wife in the summer of 2014. They rented out a property they owned in Kelowna, BC, and came back to find what he describes as $22,000 worth of damage. "This was an awful experience," Lenz recalled in an interview. "The basement was flooded due to the tenants trying to make an above-ground swimming pool, and there were two giant trucks of garbage on the property."
Naborly looks at the price of gas, the stability of the economy, and how that applicant's field of work is faring
Naborly lets landlords create custom tenant applications that collect information on anyone who wants to rent their units. It can go beyond credit score checks. Via an algorithm, It analyzes data on a tenant and spits out a score that helps landlords identify any potential risks associated with a would-be renter.
More than 500,000 rental units have been processed via Naborly across the US and Canada since its January launch, Lenz noted. (The startup only works with residential units right now, not commercial.)
Renting to a bad tenant can be a nasty experience for the landlord. But for tenants, renting a place to live has become akin to a competitive sport, especially in Toronto and Vancouver. The latter is experiencing a tiny 0.5 percent vacancy rate, according to a researcher at the University of British Columbia's School of Community and Regional Planning, who spoke to CTV.
A Bank of Montreal report found that 60 percent of millennials surveyed are weary of paying rent, but around 70 percent are willing to delay buying a home until they can afford what they really want—so they plan to continue renting.
As a result of all this, landlords in some cities may be overwhelmed by applicants, even for a dimly lit basement apartment.
"For landlords, we give them a better system to assess tenants," Lenz said. Beyond the usual criminal and credit score checks, Naborly uses an algorithm and a team of trained human analysts to crunch variables such as income verification, previous landlord verification, external media searches (if you've been in the news for public drunkenness or other shenanigans, the landlord will find out) and social media analysis.
Naborly's software, for example, can scour publicly available social media sources to verify an applicant's identity, or to figure out if they might have a pet dog that they didn't disclose with their application.
Naborly also looks at macroeconomic trends such as the price of gas, the stability of the economy locally versus nationally, and how that applicant's field of work is faring.
"If someone is a 28-year-old graphic designer in Toronto, our software can compare you to others in that same field, age group and region and see what would happen if that designer is placed in the requested property," Lenz said.
Lenz said that, for renters, Naborly aims to make the application and screening process simpler and fairer. "We help level the playing field by removing unwarranted bias that many tenants experience," he told me. "Credit alone is not an accurate representation of who a tenant really is. Our algorithms look at more data than ever before so that we have more context before making a recommendation."
For younger, newbie landlords, a digital service such as Naborly might be ideal to help manage the heady process of finding the right tenant. Of course, with detached homes now selling for well over $1 million in Vancouver and Toronto, younger people in those cities will more often find themselves on the other end of the equation.
So if you're looking to rent, you should know that your potential landlord now has Naborly to make sure you're worthy.
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